Wachovia dives in swan-song quarter

Wachovia Corp. reported a massive third-quarter loss today in what is likely to be its last earnings report as an independent company. The Charlotte, N.C.-based bank, which is being bought by San Francisco-based Wells Fargo & Co., posted a $23.89 billion quarterly loss, or $11.18 per share, compared to a profit of $1.62 billion, or 85 cents per share, in the year-ago period. Wachovia set aside $6.63 billion to cover loan losses and build its credit reserves during the quarter. The poor performance also included an $18.7 billion impairment charge, which reflected lower market values and terms of the pending Wells Fargo all-stock transaction, which is estimated at $14 billion. Assets under management were down 24% from the end of 2007, at $209.1 billion, due to net outflows of $40.6 billion and $25 billion in lower market valuations. The Wells Fargo transaction is on pace to close in the fourth quarter, Wachovia officials said. “Although this has been a challenging quarter, Wachovia's underlying businesses remain solid and our franchise exceptionally attractive,” Robert Steel, the bank’s chief executive officer and president, said in a statement.